What Is a Contingency?

The short definition

A contingency is a condition in your purchase offer that must be met for the sale to move forward. If a contingency isn't satisfied, it typically gives the buyer a way to cancel the contract and get their earnest money back.

Common types

• Inspection contingency: allows the buyer to cancel or renegotiate based on inspection findings
• Financing contingency: protects the buyer if their loan doesn't get approved
• Appraisal contingency: addresses what happens if the home appraises for less than the offer price

Why it matters

Contingencies are your main protection during the offer process. Waiving them can make an offer more competitive in a hot market, but it also means giving up that protection — worth thinking through carefully with your agent.

Related terms

Earnest Money